TRXC CEO allegedly unaware that 1MDB's RM3b fund transfer was misused

KUALA LUMPUR (June 28): TRX City Sdn Bhd (TRXC) CEO Datuk Azmar Talib said he was unaware that funds of RM3 billion transferred to 1Malaysia Development Bhd (1MDB) between mid-2012 and early 2017 were to be diverted from their intended use.

“What happened beyond TRX City, I wouldn’t know. We were under 1MDB, so all financial matters were managed by 1MDB. All the money was secured for the TRX [Tun Razak Exchange] project, so they manage [it] and was supposed to give the money to us when we need it.

“At the same time, I have done my level best and I have ring-fenced about RM2.4 billion worth of money for the TRX project,” he told reporters at a briefing at the TRX Gallery here today.

“We have filed the [police] report and it is now being investigated by the police and I believe they will do what is necessary to find out and come to conclusion. As far as we concerned, we have and will be giving full support to the police for the investigation,” he added.

Formerly known as 1MDB Real Estate Sdn Bhd, TRXC was the property arm and subsidiary of 1MDB before it was transferred to the Ministry of Finance (MoF) in March last year as part of a restructuring process.

Currently a wholly-owned subsidiary of the ministry, TRXC is the master developer of the 70-acre TRX and the 486-acre Bandar Malaysia development in Sungai Besi here.

When asked how the company will ensure the additional RM2.8 billion of funds from the government will not be misappropriated again, Azmar said that instead of one lump sum, the funds will be distributed in tranches.

Moreover, it is made clear that the funds are meant for the development of TRX’s entire infrastructure, which is expected to be completed by 2024.

He added that TRXC is unfazed by the ongoing investigations on 1MDB and the 70-acre project is actually gathering more interest from potential investors since the government announced its
intention to continue its development.

“I think the government has made very, very clear that TRX has been segregated from 1MDB and the ultimate shareholder is MoF, so that’s why our business is continuing as usual.

“We don’t have the issue on [securing] new investors. We have received numerous enquiries from local and especially international people who are looking for opportunities of relocating themselves to TRX or participating in the project,” he said.

He added that the developer is currently in talks with at least 10 interested parties, with some of them from Europe, Japan and China.

“There are many [but] I can’t remember the number. There was a low time and people were uncertain but once the government has made the decision [to continue the project], there is a big gush again. These are international players who are very serious. I have never experienced that before,” he said.

To date, TRX has signed with Lendlease to jointly develop the Lifestyie Quarter; Indonesia property developer Mulia lntenational to develop the Exchange 106; HSBC Malaysia and Affin Bank Bhd for their new headquarters; IJM Bhd to build Prudential Malaysia’s new headquarters; and Lembaga Tabung Haji and WCT Bhd for residential developments.

Meanwhile, Veolia Water Technologies will be managing the district’s waste water treatment and recycling plant.

The development of TRX is progressing well and it is expected to open for business beginning early next year with the completion of Exchange 106 and Menara Prudential, said Azmar.

“Phase 1 of TRX comprises the Exchange 106 and Menara Prudential, both of which are slated for occupancy early next year. To date, 80% of the Phase 1 infrastructure is completed. We expect full completion in time for the opening of the two buildings,” he added.

Phase 2 of TRX’s infrastructure, which consists of a public plaza, streetscapes and the 10-acre Central Park, will be completed in 2020, on time for the opening of the Exchange Mall and the new headquarters of HSBC Malaysia and Affin Bank.

“The development cost is about RM6 billion. So at the end of the day, there will still be money to be made out of TRX,” he noted.

According to the developer, the TRX project is divided into two sites – the North and the South site, which spans 57 acres and 13 acres, respectively.

To be completed in phases over the next 15 to 20 years, the RM40 billion project is currently focusing on the North site, which only has four parcels of lands yet to be commercialised, while the South site has only begun the development of infrastructure.

“The four plots of land, which has a combined area of about four to five areas, will be developed once the infrastructure is ready and when it is the right time to unlock the potential of the lands. And there is also no point for us to push [the development of the South site] now. We will focus on the North site first,” said Azmar.

Looking ahead, he said TRXC will embark on a value engineering exercise to enhance and optimise operations and working closely with consultants to find ways to save cost.

“We are currently working with our technical experts and consultants to enhance the TRX project’s cost structure. Rest assured, our exercise will be done without compromising the intended scale, functionality and quality to create a new central business district for Kuala Lumpur.”